Corpus ID: 92979916

Common Ownership and Competition in the Ready-To-Eat Cereal Industry ∗

@inproceedings{Backus2018CommonOA,
  title={Common Ownership and Competition in the Ready-To-Eat Cereal Industry ∗},
  author={Matthew Backus and C. Conlon and M. Sinkinson},
  year={2018}
}

Matthew Backus, C. Conlon, M. Sinkinson

Published 2018

Publicly-traded firms have a fiduciary duty to shareholders, which motivates the assumption of firm-level profit maximization. However, if those shareholders have an interest in competitors, the assumption might be misguided. We begin by documenting a broad increase in common ownership over time and show the implications for firm incentives through the lens of profit weights. We then investigate this concern in the ready-to-eat cereal industry, using matched product-market and ownership data… CONTINUE READING

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